On getting out of Debt (I bought back my Freedom)

Two years ago I was in a lot of debt. I mean A LOT! We are talking seven figures here. I was ok with it because I considered it ‘good debt’ (i.e. it was all investment related). I earned a good wage, worked in a secure job, could comfortably make the repayments and my assets were consistently growing in value. I was also clueless about what debt really means.

I learned the hard way that debt is equivalent to slavery or at the very least forces you into indentured servitude. The minute that any of my lenders wanted the money back, I had to be prepared to give it. This happened to me a number of times in late 2008 as margin loans were called in because of falling stock prices. My lowest point was the day I received a margin call while on Christmas vacation in Mexico. Rushing around to arrange fund transfers internationally with limited communications was not the way I wanted to be spending the holidays. After a few months of sleepless nights I resolved to sell all my stocks, and I exchanged financial loss for some peace of mind. It was an expensive lesson, but at that point I had my eyes opened to the real world lurking beneath the veneer of modern life.

While shackled to my debt repayments I had no choice but to keep working, even if I hated my job. I had no freedom. I exchanged my time for money, and in the process I felt like my precious time was slipping away. I dearly wanted to work less and undertake some personal projects I was passionate about but instead I felt I needed to stick with a high paying job for the ‘security’ it afforded in making those loan repayments. In some ways I sold my soul for a salary.

Once I had my eyes opened to the true nature of money and debt, I made the decision to get out of debt entirely and do it as quickly as possible. I made some tough decisions about my assets and was fortunate enough to sell some Australian properties quickly for a reasonable price. I’m not sure how much bigger the Australian property bubble can inflate, so I felt quite comfortable with this decision. I’ve always been a saver, so tightening the budget wasn’t too difficult for me. Brendan and I stopped going out for coffee as often and we found lots of free things to do around town. In the process of simplifying our life, frugality was a natural outcome. Growing a vegetable garden, cooking at home and consuming less were not only good for our finances, they were also great steps to take towards a more sustainable and self-sufficient life. As my debt began reducing, the snowball effect started to kick in. With less debt came smaller interest payments and the whole process sped up.

As of today, I’m pleased to announce that I’m now debt free!

In less than 18 months, I’ve paid off seven figures worth of debt. I think I may have single-handedly killed the economy, but I’m OK with that.

It’s still hard for me to come to terms with it. This was a huge goal for me and proves once again that if you set your mind to something you can find ways to achieve that goal. I have bought back my freedom!

Now that I’m no longer shackled to loan repayments I can CHOOSE how I want to live. I can CHOOSE to leave my job and study basket weaving if I so desire. I can CHOOSE to work part-time. I can CHOOSE to move to the country and raise goats and chickens. I can CHOOSE to stay in my current job for as long as it remains fun. Whatever my dream, I am now FREE to pursue it.

I’d like to take this opportunity to thank all those personal finance and frugality bloggers out there who inspired me in the initial part of this journey. I’d also like to thank my husband and best friend, Brendan for all his support. We make a good team.

So what next? Well I guess I want to encourage people to make this one of their goals. There are so many good reasons to break away from debt slavery and I intend to dedicate some future posts to this issue as well as some personal finance related topics based on issues we might encounter in an uncertain future .

Read more from me:

Voluntary Simplicity, Frugality and why all this economic stuff is relevant

photo by: Strevo

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9 comments

  1. marvellous, what a relief. I HATE debt. we live debt free and its a nice change, expecially with kids and it gives me the options for exploring so many other things in life. I do however realise that it is a bit of luxury as we already own our own home.

  2. Congratulations.

    That is such an achievement. I expect both of you are extremely proud of your success.

    It’s one we are also working toward but honestly with one wage and a medium size home loan it’s going to take more than 18 months to pull it off.

    Kind Regard
    Belinda

  3. Yay for you!!! You have inspired me to get a little more serious about getting out of debt. Off to share your story with the hubby…Thanks for sharing.

  4. Incredible news!!! You must be feeling so light! You had to make some crazy hard decisions but you stuck to your gut and now the world and all its goodness is there to fully enjoy! I cannot be happier for you both!

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